Could a Texas Commission for the Deaf member also work for a local deaf council that received a commission contract?

Texas AG Opinion JM-884: Conflicts When Commissioners Also Serve Local Deaf Councils

Plain-English summary

The Texas Commission for the Deaf contracted with local nonprofit councils to deliver services. Its chairman asked whether a commissioner could also serve as a council member, employee, or adviser.

A commissioner who was paid by a local council had a financial interest in the council and in contracts benefiting it. Common law prohibited a state officer from holding a direct or indirect pecuniary interest in an agency contract. A contract made in violation of that policy was illegal and void, so the individual had to resign from either the commission or council before the contract could be valid.

A separate dual-agency problem arose when the commissioner could enter contracts for the council. The same person could not represent the state commission and the other contracting party. The state was entitled to the agent's best efforts and unbiased judgment.

Article 6252-9b also said a state officer or employee should not accept outside work or compensation reasonably expected to impair independent official judgment. The Commission for the Deaf qualified as a state agency for that rule.

Section 81.002(d) barred an officer, employee, or paid consultant of an association representing deaf or hearing-impaired persons from serving on the commission. The opinion read that phrase as describing an organization whose major efforts focused on policy advocacy for deaf or hearing-impaired people. Whether a particular local council fit that description was a factual question the Attorney General could not decide.

A 1987 amendment also made a person ineligible for appointment if the person or spouse worked for or managed an organization regulated or funded by the commission. That amendment did not apply to members already holding office on September 1, 1987, but governed later appointments.

Currency note

This opinion was issued in 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a paid council employee remain a commissioner while the commission contracted with that council?

No. The financial interest made the contract illegal and void. The person had to leave one of the positions first.

What if the commissioner was unpaid?

The pecuniary-interest rule depended on compensation or another financial interest. Other restrictions, including dual agency, impaired judgment, and the statutory association bar, could still apply.

What was the dual-agency problem?

A commissioner with authority to sign or negotiate for the council would represent both sides of the same contract, which common law prohibited.

Did every local deaf council count as an association barred by section 81.002(d)?

Not automatically. The opinion said the category focused on organizations whose major efforts were policy advocacy, and classification of a particular council required factual findings.

Did the 1987 appointment restriction apply to existing commissioners?

No. The statute exempted members already in office on September 1, 1987, while preventing the issue for later appointees.

Background and statutory framework

Human Resources Code section 81.006 authorized the commission to provide services and contract or grant funds to agencies, organizations, or individuals. The appropriations act directed local-contract-service funds to local councils.

Meyers v. Walker, 276 S.W. 305 (Tex. Civ. App. - Eastland 1925, no writ), supported the common-law ban on a public officer's financial interest in an agency contract. Attorney General opinions had applied the same rule and treated violating contracts as void.

Scott v. Kelso, 130 S.W. 610 (Tex. Civ. App. 1910, no writ), supported the policy against one agent representing both parties. Article 6252-9b supplied the independent-judgment standard.

Sections 81.002(d) and 81.002(f) imposed additional membership restrictions. The latter applied prospectively to later appointees whose organizations received commission money or regulation.

Citations

Statutory authority:

• Human Resources Code sections 81.002(d), 81.002(f), 81.0021(a)(3), and 81.006
• V.T.C.S. article 6252-9b, sections 2(8) and 8(c)
• General Appropriations Act, Acts 1987, 70th Legislature, Second Called Session, chapter 78, article II

Cases:

• Meyers v. Walker, 276 S.W. 305 (Tex. Civ. App. - Eastland 1925, no writ)
• Scott v. Kelso, 130 S.W. 610 (Tex. Civ. App. 1910, no writ)

Prior Attorney General materials referenced: JM-817 (1987), JM-671 (1987), MW-179 (1980), H-1309 (1978), JM-171 (1984), H-916 (1976), M-714 (1970), and O-2929 (1942).

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-884
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0884.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Obvious character-level OCR errors have been corrected, but minor errors may remain; the linked PDF is authoritative.

THE ATTORNEY GENERAL
OF TEXAS

                         April 5, 1988

Mr. Sidney J. Braguet Opinion No. JM-884
Chairman
Texas Commission for the Re: Whether a conflict of
Deaf interest results from certain
P. O. Box 12904 employments by members of the
Austin, Texas 78711 Texas Commission for the Deaf
(RQ-1234)

Dear Mr. Braguet:

  You request an    opinion about     conflicts   of   interest

that might arise when members of the Texas Commission for
the Deaf serve as officers or employees of other entities.
You state that some commission members serve as members,
employees, or advisory members, of nonprofit local
councils for the deaf with which the Texas Commission for
the Deaf contracts to deliver direct services as provided
by the appropriations act, and you ask whether such dual
service constitutes a conflict of interest under state
law.

 Section        81.006 of   the Human Resources            Code   provides

in part that the commission shall:

         (2) provide direct services to the deaf,
     including   interpreter   services,     information
     and    referral     services,      message      relay
     services,    advocacy    services,     services    to
     elderly deaf and hearing impaired,          training
     in basic life skills and job-seeking         skills,
     and individual    and family counseling:

         (3) work     to   ensure     more     effective
     coordination   and   cooperation     among   public
     and    nonprofit     organizations        providing
     social and    educational    services     to    deaf
     individuals.   . . .

Hum. Res. Code §81.006(a). In addition, the commission
may:

                                p. 4318

Mr. Sidney J. Braguet - Page 2 (JM-884)

         (4) contract with or  provide grants             to
     agencies, organizations,   or individuals            as
     necessary to implement this chapter.

Hum. Res. Code §81.006(b). The current appropriations act
appropriates funds for "Local Contract Services" subject
to the following rider:

         5.  The Commission   shall use  all    funds
     appropriated  in Local   Contract Services    to
     enter into contracts   with local councils   for
     the deaf for only those services and amounts
     so listed.

Acts 1987, 70th Leg., 2nd C.S., ch. 78, art. II, at 12,

14. Similar provisions were included in the prior
    appropriations act. Acts 1985, 69th Leg., ch. 980, art.
    II, at 10, 12. A number of contracts have been awarded to
    local councils with starting dates of September 1, 1987.
    See Tex. Comm'n for the Deaf, 12 Tex. Reg. 2868 (1987)
    (notice of contract awards): Texas Sunset Advisory
    Commission, Final Report (Jan. 1985) at 160.

    Officers of state agencies are prohibited from having
    a direct or indirect pecuniary interest in a contract
    entered into on behalf of their agency. Meyers v. Walker,
    276 S.W. 305 (Tex. Civ. App. - Eastland 1925, no writ);
    Attorney General Opinion Nos. JM-817, JM-671 (1987);
    MW-179 (1980); H-1309 (1978). If the commission members
    who serve as members, employees, or advisory members of
    local councils are compensated for their services, they
    have a pecuniary interest in the local council and the
    contracts benefitting it. m Attorney General Opinion
    Nos. JM-171 (1984); H-1309 (1978); H-916 (1976); M-714
    (1970). Contracts made in violation of the policy
    prohibiting such pecuniary interests are illegal and void.
    Meyers v. Walker . Thus, the commission cannot
    legallyVcontract &it??local council in which a commis-
    sion member has a pecuniary interest. The commission
    member will have to resign from either the commission or
    the local council before such contracts may be validly
    entered into.

    If a commission member holds a position with a local
    council which authorizes him to enter into contracts on -,
    behalf of it, another legal doctrine would also bar such
    contracts. In such cases, the same individual attempts to
    represent both the Commission for the Deaf and the local
    council in contract formation. Attorney General Opinion
    ?,
    H-1309 (1978) stated that a policy against dual agency

                             p. 4319
    

    Mr. Sidney J. Braguet - Page 3 (JM-884)

    prevented one person from representing both a state agency
    and the other party in forming a contract. The state is
    - entitled to the best efforts and unbiased judgment of its
    agent. Attorney General Opinion O-2929 (1942) (guot$ng
    and discussing Scott v. Kelso, 130 S.W. 610 (Tex. Civ.
    App. 1910, no writ)). if a commission member is
    also an employee or membek of a local council with
    authority to contract on behalf of the council, the policy
    against dual agency would prevent the commission from
    entering into a contract with that local council.

      Section 8 of         article 6252-9b, V.T.C.S.,            is relevant
    

    to your question. It includes the following standard of
    conduct:

             (c) No state officer    or state    employee
         should accept other employment    or   compensa-
         tion which could   reasonably  be expected     to
         impair his independence    of judgment   in   the
         performance  of his official duties.
    

    V.T.C.S. art. 6252-9b, §8(c). This provision applies to
    the officers and employees of a "state agency," which is
    defined in part as:

             (A)    any department,          commission,       board,
         office,    or other agency         that:
    
               (i)    is in the   executive      branch      of state
               government;
    
               (ii)  has authority  that   is not             limited
               to a geographical   portion of the              state:
               and
    
               (iii) was    created    by the   constitution       or
               a statute    of this    state.   . . .
    

    V.T.C.S. art. 6252-9b, §2(8). Thus, section 8 of article
    6252-9b, V.T.C.S., applies to the Commission for the Deaf,
    even though it is not a "major state agency" for purposes
    of that statute.

      You point  out section 81.002(d)                  of    the Human   Re-
    

    P sources Code which provides as follows:

             (d) An officer.    employee.  or    paid con-
         sultant of   an association    representing     the
         interests  of deaf or hearing-impaired     persons
         may not   be  a member     or  employee    of   the
    
                                  p. 4320
    

Mr. Sidney J. Braguet - Page 4 (JM-884)

     commission,    nor   may     a person     who   cohabits
     with or is     the spouse of       an officer,      mana-
     gerial employee,       or    paid consultant      of    an
     association     representing       the    interests     of
     deaf or hearing-impaired         persons be a member
     of the   commission       or   an    employee    of   the
     commission     grade    17    and    over,     including
     exempt employees,      according      to the    position
     classification      schedule      under    the   General
     Appropriations     Act.     (Emphasis added.)

Hum. Res. Code §81.002(d). It is a ground for removal
from the commission if a member violates section
81.002(d). See Hum. Res. Code .§81.0021(a)(3).

  Section 81.002(d)      was   adopted in 1985        in connection

with review of the commission by the Sunset Advisory
Commission. m Acts 1985, 69th Leg., ch. 619, 51, at
2300. It is one of a number of "across the board"
recommendations of the Sunset Advisory Commission which
the legislature adopted for the Commission for the Deaf.
See Bill Analysis to S.B. No. 384, 69th Leg. (1985).
Conflict of interest provisions are recommended by the
Sunset Commission to prevent agencies from developing
close ties with professional trade organizations and other
interest groups which may not be in the public interest.
Texas Sunset Advisory Commission, Final Report (Jan. 1985)
at 2. In our opinion, "an association representing the
interests of deaf or hearing-impaired persons" directs its
major efforts toward advocacy of policies regarding deaf
or hearing-impaired persons. Whether a particular entity
is the kind of association described by that provision is
a fact question which cannot be answered in an Attorney
General Opinion.

   We finally point       out the     following   provision       which

was adopted in 1987:

         (f) A person is not eligible    for appoint-
     ment as  a member   of the   commission  if   the
     person or the person's  spouse:

               (1)  is employed by or participates          in
           the management     of  a business   entity       or
           other   organization     regulated    by        the
           commission   or  receiving    funds  from       the
           commission.   . . .

Hum. Res. Code §81.002(f); Acts 1987, 70th Leg., ch. 343,
§2, at 3490. This provision does not apply to a member of

                            p. 4321

Mr. Sidney J. Braguet - Page 5 JM-884)

the Texas Commission for the Deaf who held office on
September 1, 1987. L 5511, 14, at 3497, 3498. Although
it does not apply to the conflicts of interest you inquire
about, it should prevent them with respect to persons
appointed after the effective date of this provision.

                           SUMMARY

         Common law   prohibitions    against     conflict
     of interest prevent the Texas Commission           for
     the   Deaf  from   contracting     with    a     local
     council for the deaf      if a commission      member
     serves the local council       as a paid     employee
     or   in   a  decision-making      capacity       which
     authorizes  him to    contract   for the     council.
     Whether a particular       local council      is    "an
     association  representing    the deaf or hearing-
     impaired persons" within section 81.002(d)           of
     the Human Resources    Code is a fact question.




                                         JIM      MATTOX
                                         Attorney  General   of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General

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